Capital Conversations returns to Knoxville for the second year
The annual event was hosted at the new 121 Tech Hub in the Old City.
One of the most asked questions in Knoxville is how to raise capital from an East Tennessee base. On Tuesday night, the team at Launch Tennessee drove to Knoxville for the second round of “Capital Conversations.” The series was designed to answer entrepreneur’s questions about how to obtain capital from the InvestTN fund, and where to go for other lending options.
This year, the panel consisted of Shane Jackson from Pinnacle Financial Partners, Katie Hendrix from Pathway Lending, Keith Hickey from Three Roots Capital, and Eller Kelliher from Launch TN.
Kelliher began the session by explaining how the InvestTN funds are distributed. The fund contains early-stage investment capital for start-ups and companies raising Pre-Seed, Seed, Series A or B funding. There is $28 million allocated for a Regional Seed Fund and $36M for a Growth Fund. The regional fund allocations will be smaller, between $25,000 and $250,000; whereas the Growth Fund will support start-ups with up to $8 million. The money comes from the “American Rescue Plan Act” which expanded the State Small Business Credit Initiative (SSBCI) via US Treasury to provide $10 billion nationally to support small businesses and start-ups based in the U.S. post pandemic.
“These funds are already contracted through the federal government, and it would take a lot to unwind at this point,” Kelliher shared, when asked about how federal policy changes in the coming years could affect the dollars.
Kelliher shared how founders who apply for InvestTN investment must prepare to raise a 1:1 match for those dollars from private investment. This cannot be personal dollars, debt, or grant-financing. It must be private investment. Launch Tennessee requires this to help private investors feel motivated to get off the sidelines, and further prove the company’s investability. The organization also wants to ensure that the founder has some skin in the game – and a motivation to return the investment.
“When investments return capital it just goes back into another fund to continue giving to entrepreneurs,” Kelliher said. “It goes around and around helping more people.”
The panel of others agreed with the sentiment of wanting to find founders who are motivated to return the investment.
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